Credit cards causing headaches for exchanges

Exchange builders in the District of Columbia are dealing with one of the nuts-and-bolts questions facing organizers of public and private insurance exchanges throughout the United States: How to let the customers pay their premiums.

DC Health Link wouldn't charge customers any extra fees for paying with plastic and would treat card-related fees as general operating costs.

When the exchange emerges from its startup phase and becomes self-supporting, it will cover the cost of operating costs, including the card-related fees, by having carriers pay an assessment, exchange officials said.

The D.C. exchange managers would require Small Business Health Options Program exchange users to do without plastic in 2014.

The exchange managers would consider taking SHOP premiums via credit card and debit card in 2015, if interest in that option appears strong.

The District of Columbia is setting up its own district-based Patient Protection and Affordable Care Act exchange.

The Center for Consumer Information & Insurance Oversight, the U.S. Department of Health and Human Services agency supervising the exchange program, wants exchanges to let customers pay with many different methods, but it hasn't officially required builders of state-based and district-based exchanges to accept debit and credit cards.

Mark Waterstraat, an executive at Benaissance, a D.C. exchange financial services vendor, told the D.C. exchange board that the D.C. exchange as decided to let consumers pay with mailed checks, mailed money orders and automated account debiting transactions, to help unbanked and underbanked D.C. residents can use the exchange.

Bonnie Norton, a D.C. exchange staffer, said other exchange agencies are taking a wide variety of approaches to payment cards.

Managers of the Massachusetts exchange decided against taking plastic.

For them, "it was too complicated and expensive," Norton said.

Rhode Island is following Massachusetts' lead.

Vermont is planning to accept payment cards but pass the costs on to the users.

The Maryland exchange also is planning to accept payment cards, but the participating carriers there will absorb the card-related costs, Norton said.